It seemed a taxpayer's dream come true. Empowered by two newly implemented state laws, voters in cities around Los Angeles County trooped to the polls with the clout to slash the taxes that hit closest to home. But a funny thing happened on the way to the ballot box: Voters chose not to wield their tax-cutting ax. Instead, most of the tax measures facing voters in Tuesday's municipal elections won, many by landslide margins unusual even for issues without a pocketbook impact.

A coalition of business, building and local government groups called on Gov. Pete Wilson on Tuesday to help financially struggling cities and counties--setting up what could be a major tussle in this year's state budget battle. "We think it's one of the most critical issues facing the state," Assemblyman Michael Sweeney (D-Hayward) said, adding that "unfortunately [Wilson] has not shown a willingness" to assist local government.

Gov. Pete Wilson will propose $225 million more for California's financially ailing cities and counties this week as a way to share some benefits from a booming state economy. The funds are aimed at offsetting some of the revenue that the state took from local governments during the recession in 1993 and 1994. The money was welcomed Sunday by struggling local administrators--particularly in Los Angeles, where county officials expect to receive from a third to half of the windfall.

Outraged over Orange County's bid to shift the burden of its bankruptcy onto them, a coalition of local government officials on Monday unveiled a plan of its own to end the county crisis through the purchase of the county's airport and landfills for $415 million and indefinite postponement of repaying county debts owed cities and special districts.

Covina city officials are leading the charge for 28 Los Angeles County cities that want to change the way Sacramento distributes the sales tax so municipalities get more money. The state gets 5% of Los Angeles County's sales tax revenues, while cities get 1%. Under Covina's proposal, cities would get 2% and the state would get 4%. "This is consistent with a trend through the nation to shift responsibilities and monies from Washington to the state.

In a move that could save taxpayers millions, Orange County gained court clearance Monday to pursue the most cost-effective route for a partial repayment of its debts to schools, cities and others that had money in its collapsed investment pool. With approval from Superior Court Presiding Judge James L. Smith and U.S. Bankruptcy Judge John E.

A new survey of North American government investment managers conducted because of Orange County's financial crisis shows that most invest only in conservative securities, with nearly half shunning the derivative securities that helped sink the county's investment pool and 78% saying they do not leverage funds for investment purposes. Sponsored by the Government Finance Officers Assn. and MBIA Insurance Corp.

Residents will probably not see significant cuts in city services as a result of the Orange County financial crisis, a panel of municipal officials predicted Friday. But if the beleaguered county government does not recover, officials said, residents will witness a decline in their quality of life as social services, law enforcement, the library system and other county programs are slashed.

Mayors from across Orange County plan to sign a letter tonight to the Board of Supervisors that contains a counterproposal to guarantee 100% refund of city money frozen in the bankrupt investment pool. The letter was drafted by the Orange County Division, League of California Cities, at the request of officials from Orange County cities, said Janet Huston, League of California Cities executive director.

September 6, 1995 | SHELBY GRAD and MIMI KO CRUZ, SPECIAL TO THE TIMES

For $100 a night, the amenities are few. Your room is a 20-square-foot cinder-block box with barely enough room for a metal bunk bed, toilet and sink. The meals come straight from the freezer to the microwave to you: Salisbury steak for dinner, macaroni and cheese for lunch. The floor is cold concrete and the only views are from behind steel prison bars. The Fullerton City Jail is no vacationer's paradise.